The value of a company is the sum of the value of equity and the value of debt. You are required to calculate the value of Lemon Plc., given the following financial information: - Lemon currently has in issue 10-year corporate bonds with a total face value of 20million. Each bond has a face value of 100. The coupon payment on the bonds is 2.6% and the bond is due to mature in 2026. This means that Lemon plc, has 6 years of interest to pay on the bonds (2021, 22, 23, 24, 25 and 26). In 2026, the company will have to repay the 20million to its debt investors. Given that the next best alternative investment for its debt holders is presently 1.2%, calculate the present value of Lemon debt. Lemon Plc. currently has 20 million 50p ordinary shares in circulation. The required return on the equity of Lemon is 3%. The expected dividend payments for the next three years are given in the table below. Beyond 2023 it is expected that the dividend per share will grow at 0.5% per annum forever. Year 2021 2022 2023 Dividend per share (in p) 10 13 1 5 Required: a) Calculate the value of Lemon Plc.'s debt b) Calculate the value of Lemon Plc.'s ordinary shares c) Using your answer from (a) and (b) above calculate the total value of Lemon Plc. d) Explain how new equity contracts are issued